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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Jock Hutchinson who wrote (24232)	9/28/2001 8:21:28 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 25814

Not so fast. The PE ratio of the QQQ at its peak was something like 240, maybe even higher. So, at current prices, and even if we consider peak earnings, the PE ratio is around 60. And that assumes that the quality of earnings was high -- a very big assumption. The accounting abuses that have occurred -- the non-expensing of stock options for employee compensation and the promiscuous use of so-called "non-recurring" charges to cover past strategic errors, would make even those earnings numbers questionable, to put it mildly. And if we consider price/sales as the valuation metric, the top 40 of the Nasdaq 100 are still selling at something like 7 times sales. If we get to 2 times sales, then maybe we can call it undervalued. Let's face it -- we are in the aftermath of a burst bubble, and any gains you will make in tech stocks is through trading. Long term buy-and-hold strategies could be disastrous, unless you buy them when even people like Addi give up and the valuations are like, one times sales.